Friday, October 2, 2009
Welcome to MesoLink.org / * 911 SCIENCE
Mesothelioma is one of the deadliest diseases known to man; the average life span of an inflicted person from the time of diagnosis until death is less than 24 months. It’s a disease that strikes approximately 3,000 United States citizens each and every year; hard working people who have labored for a lifetime to provide for their families, doing the work that keeps this country running and a great place to live. They worked in factories, at shipyards, in mines, for the US military, as engineers, as pipefitters, as steel workers, as auto mechanics, and in so many other professions. They came home to their loved ones exhausted and covered in dirt and dust; tired, but content that they had a job and were providing for their family. Content that they were putting food on the table and a house over their loved one’s heads. Content that they were working to make a better life for their families in this generation and the next...
But what they didn’t know was that while they were working so hard, they were not only slowly killing themselves, but those that they were working so hard to help; their family, their loved ones.
Mesothelioma is a disease that is almost 100% preventable; the only known cause is via exposure to the deadly mineral Asbestos. It comes from inhaling the particles of dust as the asbestos degrades; eating away at the lining of your lungs and developing into a deadly cancer. Dust that was inhaled in clouds of white powder, dust that was carried home on the clothes of the men who built this country, dust that was cleaned from the clothes by the wives and children who supported their sole provider at home, dust that was packed around the heating systems in houses and offices and schools, dust that carried a deadly price; and dust made a fortune in blood money for the companies that produced it.
Unfortunately, the effects of asbestos on the human body were known to be deadly for years by the companies who employed the ‘greatest generation’ and made hundreds of millions, if not billions, of dollars off of their backs. But instead of taking simple steps to alleviate the problem and save the lives of thousands of their workers, they choose to do nothing and continue to make a “healthy” profit with a “deadly” product. Many even went so far as to hide the truth from their workers and their families. And because the normal latency period for Mesothelioma (The time from exposure until the patient falls ill) is 20 to 30 years, many got away with this for years. We are only now beginning to see the full effects of the disease, and feel the terrible outcry of the people against those who put profits before human lives to a degree that is simply unfathomable.
MesoLink.org is a site created to provide you with up to date information on the deadly disease Mesothelioma. We strive to provide the most complete overview of the disease and all aspects of it. This includes general information on the disease, breaking news on the search for a cure and perspective legislation designed to limit you as well as all other news on the subject, links to other sites and online resources that can provide important and in-depth Mesothelioma and cancer related information, and a legal guide to help you with the complex legal issues involved with Mesothelioma.
泰國‧東盟峰會掀變數‧“紅衫軍”要展開大示威
（泰國‧曼谷）泰國10月將主辦東盟峰會，反政府“紅衫軍”週四（10月1日）宣佈，10月份將計劃舉行3次示威活動，雖然地點鎖定曼谷，仍為定在華欣舉行的峰會安全投下不確定因素。
“紅衫軍”領袖之一納塔勿表示，他們將10月主題設定為“全月紅”，將舉辦3次反政府示威。
他表示，1997年憲法正式實施的日期是10月11日，“紅衫軍”將在勝利紀念碑集會，要求政府恢復1997年的憲法，同時要求首相阿比希解散國會，在此憲法下舉行新的大選。
要連署彈劾阿比希
第2次示威是在10月17日，“紅衫軍”將在首相辦公大樓外示威，要求司法單位回覆他們之前為前首相塔辛連署的特赦請願。
“紅衫軍”8月中發起連署簽名活動，號稱收集了超過500萬人的簽名，為塔辛請願，10月17日正好是把請願連署送到皇宮秘書處的第60天。當時皇宮秘書處將這項特赦請願送給政府，由司法部檢定合法性。
他表示，政府有意拖延審核的過程，“紅衫軍”在10月17日當天，會再發起另一個簽名連署活動，彈劾首相阿比希。
他也說，在10月24日，“紅衫軍”將安排議會外、對政府不信任提案的辯論會。
美國‧賀中國國慶‧希拉里誓加深中美關係
（美國‧華盛頓）美國國務卿希拉里週四（10月1日）祝賀中國建國60週年慶，並稱美方將致力於與中國建設積極合作的全面關係，促進兩國人民的安全和繁榮。
希拉里發表聲明，對新中國60華誕表示“熱烈祝賀和祝願。”
她說，中國在過去30年進行了非比尋常的經濟改革，使無數人脫離貧困，“這真正是歷史性的成就”。
她補充，今年還是美中建交30週年，美國承諾將為建設積極、合作、全面的美中關係而努力，使之反映兩國之間的深厚關係，有助於兩國安全，造福兩國人民。
帝國大廈亮燈被抨擊
另一方面，美國紐約市地標建築帝國大廈史無前例地為中國國慶亮燈，卻遭到人權活躍份子猛烈抨擊，聲稱此舉認同中共的極端主義。
帝國大廈總經理貝利納發表聲明說，帝國大廈很榮幸在中國國慶60週年之際，予13億中國人民最高禮遇。
他又表示，亮燈儀式對於促進中美兩國關係和人民友誼具有重要象徵意義。
越南‧颱風重創寮國逾16死‧14村莊淹沒200人失聯
（越南‧河內）颱風“凱薩娜”重創寮國南部，當地已有16人死亡，另外還有135人失蹤。
寮國紅十字會週五（10月2日）說，與柬埔寨邊界接壤的南部阿速坡省災情最嚴重，當地已有14人死亡。
當局表示，沿岸14個村莊被洪水淹沒，約200人受困難以聯繫。
此外還有27個村莊受影響，不清楚有多少人面臨缺水缺糧困境。
而柬埔寨的風災死亡人數已增至至少17人。
越南風災逾99死
另外，越南當局週五宣佈，“凱薩娜”給越南帶來近年來最嚴重的災害，迄今已造成至少99人死亡，另還有14人失蹤。
中部廣義省災情最為嚴重，死亡人數達27人。少數民族人口眾多的崑嵩省則有21人死亡。
非洲‧人類祖宗新發現
（非洲‧埃塞俄比亞）她，可能就是咱們人類的老祖宗！
一支國際科學家團隊週四（10月1日）公佈，他們在非洲埃塞俄比亞境內，發現了距今已有440萬年的女原始人骨骼化石，是迄今所發現的年代最久遠的原始人骨骼。
這名女性原始人屬於始祖地猿，科學家將其暱稱為“阿爾迪”（Ardi），她的第一塊骨骼出土於1992年，科學家根據陸續出土的骨骼，包括帶牙齒的頭骨、手臂、手、骨盆、腿、腳（小圖）等，“復原”了其整體特徵。
科學家推測，“阿爾迪”身高約12公分米，體重約50公斤，比此前認為是最古老的人類祖先的原始人“露西”生活的年代，還要早100多萬年。在“阿爾迪”出土前，“露西”被認為是最早的人科動物之一，後者屬於南方古猿阿法種，同樣出土於埃塞俄比亞境內。
科學家指出，“阿爾迪”即使不是我們的直接祖先，她也為研究者提供了新的見解，瞭解人類是怎樣從與黑猩猩等共同擁有的祖先那裡進化來的。
科學家對其特徵進行的分析表明，人與黑猩猩的共同祖先，與如今的人類和黑猩猩特徵迥異，因此，往後在研究人類進化時，不宜再將黑猩猩當作共同祖先的“替身”。
新加坡‧不受地震影響‧金沙空中花園工程照展開
（新加坡）濱海灣金沙工程不受蘇門答臘地震影響，週四（10月1日）清晨如期展開平底空中花園建築工程。
上午5時30分，建造空中花園所需的第一件重約330噸大鋼架緩緩升起，花了半天時間，起重機才順利把它吊上55樓高酒店的頂層。
工程共有14件重達7000噸的鋼架，預計需要花長達3個月的時間吊運，每次吊運估計需24小時。
濱海灣金沙總裁兼首席執行官阿拉西說，濱海灣金沙建築工程進展順利，進度不受近日的地震影響。此外，預計在第一階段開放設施的賭場、酒店和展覽中心的建築工程大部份已完成，個別建築的外觀和主要架構都已成形。
針對外界相當關注濱海灣金沙會在明年第一季甚麼時候開業，他表示，確切開幕日期須視空中花園工程進度而定。
濱海灣金沙建築公司共聘請1萬2000名工人，是獅城歷來最大規模的建築工程之一。
長340公尺、佔地1萬2400平方公尺的空中花園，能容納3900人，除了有世界最大公共懸台及相應餐飲服務設施之外，還設有戶外泳池。
空中花園是整個濱海灣金沙建築工程最複雜及最困難的項目，離地200公尺，直到週五（10月2日）為止，還沒有人在這麼高的樓頂打造平底空中花園。其中，公共懸台長66.5公尺，可容納約900人。
新加坡‧車展春光乍泄被放上網‧走光女模：不小心露底
（新加坡）在車展上頻頻走光，不雅照片還被放上網公開的女模首度開腔，聲稱自己當天不是去工作，只是剛好有攝影師要求拍照，才不小心露底。
她是出席上週在新加坡博覽中心舉辦的超級名模車展時，被拍到春光乍泄的照片。
逛車展時被要求拍照
洪小姐（Tracy Ang）受訪時說，她當天和朋友相約參觀車展，不過朋友遲到一個多小時，在等待的途中，她獨自逛車展。結果，一名攝影師趨前詢問是否能夠在一輛參展的轎車 前拍攝一組照片。她答應之後，便開始在車上擺姿勢，結果下一分鐘，就被一群不認識的攝影師圍繞著拍照。
她澄清，身為一名專業的自由性質模特兒，她接受過訓練，可以完成任何的模特兒任務，可是當天，她並沒有意思在車展上進行任何拍攝工作。
她說，她沒有意識到裙子太短，而在毫無準備，沒有做足防護措施的情況下拍照，她承認是失誤，並深感後悔。
她也說，過往遇到專業的攝影師，如果意外走光，攝影師會提醒她注意，可是事發時，她並不知道自己已經露底，而她認為，在場的攝影師非但沒有提醒她，還把她泄春光的照片放上網譏笑，說明他們沒有誠信。
女模生活被打亂
洪小姐說，自從她的照片出現在各個網上論壇和網站包括STOMP後，生活經歷翻天覆地的改變。
“我的壓力很大，陷入人生的谷底。很彷徨失措，想躲在牆角，不想面對公眾。突然失去了人生的方向。突然面對這個局面很糟糕。”
她聲稱，自己還必須暫時搬離住家，以保護家人不受到不速之客的騷擾。
洪小姐透露，如今不實的言論仍然滿天飛，對愛惜她的家人造成傷害，因此她強調，她並不是故意要在公眾面前走光的。
台灣‧馬英九：不畏戰也不求戰‧盼台軍做好建軍備戰
（台灣‧台北）中國國慶擴大閱兵、展示先進武器引起全球矚目，台灣馬英9強調，台灣不畏戰，也不求戰，並期勉軍方做好建軍備戰。
不放鬆敵情警覺
中國60週年國慶當天，馬英九低調前往宜蘭蘇澳後勤支援指揮部進行中秋節勞軍，期勉官兵在崗位上，做好建軍備戰。
他強調，備戰是為了止戰，“我們絕不畏戰，但也絕不求戰，做到防衛固守、有效嚇阻的境界。”
總統府引述馬英九說：“雖然目前兩岸關係有實質改善，但是並不表示我們可以放鬆敵情警覺。”
他說：“所謂‘毋恃敵之不來，恃吾有以待之´，我們應持續加強戰備整備，才能有效嚇阻敵人，為台灣及人民帶來真正的和平。”
針對中國國家主席胡錦濤在國慶演講中聲稱，將繼續為實現祖國統一而奮鬥，陸委會回應說，台灣是一個“主權獨立的國家”，但同時呼吁兩岸放下過去60年的紛爭。
中國在通過國慶慶典擴大閱兵，展示各種武器與導彈，觸動島內綠營的神經。
吳敦義：兩岸有共識和平發展
對此，行政院長吳敦義則表示，中國國慶慶典的形式並非台方所能干預，但他確信，和平發展已成為兩岸的共識，不僅台灣希望兩岸和平，大陸的領導當局也對此有堅定的立場。
但他強調，維護台灣安全與主權，不能單靠對方善意；善意非絕對永久，在改善兩岸關係時，要有自我防衛的力量。
中國‧兩岸故宮聯展
（中國‧北京）北京故宮博物院和台北故宮博物院60年來首次聯合舉辦的清宮文物展覽――“雍正―清世宗文物大展”，將於10月7日開始在台北故宮舉行，北京故宮更向台北故宮借出了所藏的37件雍正時期珍貴文物。
圖為一名台北故宮人員正在介紹即將展出的文物。
Magnitude 6.3 - TONGA 薩摩亞‧仍數百人失蹤‧南太平洋再肇6.3級強震
2009 October 02 01:07:39 UTC
Earthquake Details
| Magnitude | 6.3 |
|---|---|
| Date-Time |
|
| Location | 16.579°S, 173.274°W |
| Depth | 10 km (6.2 miles) set by location program |
| Region | TONGA |
| Distances | 85 km (55 miles) SE of Hihifo, Tonga 240 km (150 miles) NNE of Neiafu, Tonga 545 km (340 miles) NNE of NUKU'ALOFA, Tonga 2535 km (1580 miles) NNE of Auckland, New Zealand |
| Location Uncertainty | horizontal +/- 9.3 km (5.8 miles); depth fixed by location program |
| Parameters | NST= 75, Nph= 75, Dmin=336.2 km, Rmss=0.98 sec, Gp= 68°, M-type=teleseismic moment magnitude (Mw), Version=6 |
| Source |
|
| Event ID | us2009mgad |
- This event has been reviewed by a seismologist.
（薩摩亞‧阿皮亞）悲痛欲絕的薩摩亞人週四（10月1日）將遇難親友安葬在海邊，當局已放棄可尋獲失蹤者的希望。海嘯罹難者迄今已達近190人。
週五（10月2日）早上，南太平洋地區又再發生6.3級的強烈地震，震央位於湯加與薩摩亞群島的水域，暫時未有詳情。
不過，夏威夷的太平洋海嘯預警中心並未發出海嘯警報。
許多村莊仍泡在水中
薩摩亞群島在週二遭8.0級強震和海嘯侵襲，許多村莊至今還泡在水中。在週三（9月30日），薩摩亞群島還發生數十次餘震。
當局證實，薩摩亞群島有149人罹難，美屬薩摩亞有31人喪生，鄰近的湯加則有9人遇難。
官員擔心，一些外島在海嘯襲擊後被夷為平地，目前還有數百計民眾下落不明。
地震和海嘯造成數以千計的薩摩亞人流離失所。
美屬薩摩亞首府帕果帕果斷水斷電，多數地區最快也要一個月才可能恢復供電，當地也嚴重缺水。
美國、紐西蘭及澳洲政府都已派遣軍隊，並提供救災物資前往。歐盟也承諾提供15萬歐元救災。
U.S. To Break Up Soon?
According to Macedonian Radio and Television On-line (MRT), a Russian professor predicts the United States will fall apart in July 2010. MRT reports, "'Mr. Obama is similar to the last Soviet leader Mikhail Gorbachev. Gorbachev was also making great promises for the Soviet Union, but the situation was only getting worse,' he said. By next summer, according to Professor Panarin, the US will disintegrate into six blocs--and everyone will get their piece. 'The probability that the United States of America fall apart in July 2010 is more than 50 percent,' said Igor Panarin, Professor at Moscow's Diplomatic Academy within the Russian Federation's Ministry of Foreign Affairs."
MRT went on to report, "Panarin came up with his grim forecast while analyzing the parallels between the Soviet Union in its final days and the current situation in the United States. 'American dream ballooned seven times in 11 years. During Gorbachev era, the Soviet dream ballooned five times.' Americans hope [President] Barack Obama 'can work miracles,' he wrote. 'But when spring comes, it will be clear that there are no miracles.'"
See the MRT report at
http://tinyurl.com/mrt-report
The Drudge Report confirmed the MRT report and added, "Professor Igor Panarin said in an interview with the respected daily IZVESTIA . . . 'The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.'"
At least some of what Panarin said back in the fall of 2008 either has taken place or is in the process of taking place. Drudge reported, "When asked when the U.S. economy would collapse, Panarin said: 'It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator.'"
Drudge continued reporting Panarin as saying that "the U.S. will break up into six parts-- the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong."
Panarin further suggested that Russia might even "claim Alaska."
See an archived version of Drudge's report at
http://www.chuckbaldwinlive.com/readarchive_20090107.html
Reporting on the same story, The Wall Street Journal said, "Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russian relations."
The WSJ goes on to say that Panarin believes that "mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar."
See The Wall Street Journal report at
http://online.wsj.com/article/SB123051100709638419.html
This is not the first time that Comrade Panarin has made such a prediction. Joseph Farah, editor of World Net Daily, noted in December of 2008 that Panarin has been making similar projections for the past ten years. In a column regarding Panarin's predictions, Farah wrote, "Until recently, no one took him very seriously. And then came the economic calamity that has rocked Americans and the rest of the world, too. Now, Panarin's predictions of an end of the United States, due to economic and moral collapse, is being taken seriously by many."
Read Farah's column at
http://www.wnd.com/index.php?fa=PAGE.view&pageId=84884
So, will the United States break up in 2010? Or 2011? Or 2012? Or anytime in the near future, for that matter? If history is any teacher, the chances would seem good that Panarin's predictions may be closer to reality than anyone would like to admit.
A historian and linguist from South Africa recently wrote me a fascinating letter, in which he chronicled the major world empires of history, dating the time of their rise and fall. Here is what his calculations look like:
Assyria (859-612 B.C.): a 247-year reign.
Persia (538-330 B.C.): a 208-year reign.
Greece (331-100 B.C.): a 231-year reign.
The Roman Republic (260-27 B.C.): a 233-year reign.
The Roman Empire (27 B.C.-180 A.D.): a 207-year reign.
The Arab Empire (634-880 A.D.): a 246-year reign.
The Mameluke Empire (1250-1517 A.D.): a 267-year reign.
The Ottoman Empire (1320-1570 A.D.): a 250-year reign.
Spain (1500-1750 A.D.): a 250-year reign.
Romanov Russia (1682-1916 A.D.): a 234-year reign.
Great Britain (1700-1950 A.D.): a 250-year reign.
The USA (1790-2009 A.D.): 219 years and counting.
My honorable historian-friend calculates America's reign using its post-Revolutionary War years. He notes that America's reign is currently at 219 years. He further notes that the average duration of every world superpower listed above is a little over 238 years.
One does not need to be a master mathematician or possess a Ph.D. to realize that America is fast approaching the mark in which every major world power in history has either collapsed or, at a minimum, lost its world leadership and power.
My friend also reminded me of his homeland's (South Africa's) demise. He told me that he noticed the handwriting on the wall in time to relocate his family to a more peaceful and stable European country. Many of his friends and countrymen were not so fortunate, however, and thousands were killed and their properties confiscated. He then warned me, "The period of Grace is closing, in what is your homeland."
In addition, serious students of Holy Writ are also struck with the similarities between societal conditions in America and those of Old Testament Israel (as well as with Gentile nations) at those times of divine judgment and retribution. As someone trenchantly said, "If God spares the United States, He will have to apologize to Sodom and Gomorrah."
Will the Russian analyst's prophecies come true in 2010? Probably not. Does that mean that America is impervious to some sort of national demise? Not at all. Is America already in serious trouble? You bet. Could there be some sort of break-up within the United States in the near future? In my opinion, that is a very realistic probability. If this happens, will freedom suffer? Almost certainly. Will those with tyrannical tendencies use the opportunity of any national disaster to try and enslave us? They already do. I personally do not believe that there is any "If" to the question. The only questions are, "When?" and "To what degree?"
And, of course, there is another question: "When the break-up comes, how many Americans understand the principles of liberty enough, and are personally prepared enough, and are willing enough to resist whatever power it may be that seeks to place us under the thumb of oppression and fight for the same protections and vanguards of liberty that first established this land?" Obviously, the answer to that question is yet to be determined, isn't it?
by Chuck BaldwinU.S. Dollar Dives Against Yen: Another Sign of the Crashing Economy
The last few months have been rocky for the dollar and it’s likely that the next few are going to be even more precarious for it. The following snippet was taken from Martin Weiss’s article titled, “U.S. Dollar Crashes Against Yen! Time to Act!”:
“The consequences are immediate: Just this past Thursday, the U.S. dollar could buy 91.27 Japanese yen. By the end of the day Friday, it could only buy 89.63 yen.
In just 24 hours, the dollar fell by 1.81 percent, more that it would typically fall in 24 DAYS!But if you think the dollar decline is far removed from your daily life, think again.
The Dollar Decline Could Deliver A Major Blow to Your Wealth”
Nearly every bit of economic news coming out indicates that the dollar slide will continue for at least the short-term. The continuing dollar’s debasement should provide more than enough incentive for us to start investing in silver and gold.
For those who don’t have money to invest in these assets you should invest in necessities that you’ll need in the future. In the following video Peter Schiff gives some good examples of things to invest in.
(Article continues below)
Now is the time to act if you value your wealth because the criminals at the Federal Reserve and the Treasury are hell bent on destroying the dollar’s buying power.
Who wanted the World War II?
Note: Malaparte, an Austrian named Stuckert, was a writer for Italian newspapers. He wrote a book, “Coup D’Etat: The Technique of Revolution” that was first published in 1932 by Dutton. This book was considered politically dangerous in the Depression years and was never reprinted. Malaparte had taken part as an observer during the Warsaw campaign and wrote from first hand experience. His excellent, but unknown, book deals extensively with the techniques of the Coup d’Etat and in specific, the sections on Trotsky and Stalin are of great historical value.
Historical Note: When Poland broke away from Russian control in 1918, the Russian Bolsheviks expressed their fury at this defection and stated that they would militarily force Poland back into the Russian fold. The Poles were commanded by Marshal Josef Pilsudski and the Soviet armies by Marshal Tukhachevski when the war broke out in April of 1920. At first the huge Russian military machine, commanded by Tukhachevski but politically directed by Josef Stalin, surged forward, driving the badly equipped Poles before them. Finally, in August of 1920, with huge Soviet armies in front of Warsaw, Pilsudski launched what proved to be a devastating attack on the overextended Russians and crushed them. Malaparte writes of the days just before the Polish counterattack when defeat for them seemed almost foregone.
“The vanguard of the Bolshevik army had already reached the gates of the town. In the workers’ suburbs the first shots were heard. Now was the moment for a coup d’Etat.
Warsaw these days looked like a town waiting to be pillaged. The great heat seemed to suffocate all voices and noises. The crowds in the streets were perfectly noiseless. Now and then an endless convoy of trams carrying the wounded would slowly steer through these crowds. The wounded sometimes looked out of the windows shook their fists and swore. A ceaseless hum spread from pavement to pavement, from street to street. A group of Bolshevik prisoners, battered, bend and limping, with red stars on the front of their uniforms, marched between hedges of mounted Uhlans. The crowd opened in silence to let them pass and immediately closed again. Fights broke out here and there only to be squashed at once by the surging crowds.
The main railway stations were besieged day and night by bands of famished deserters, refugees of every race and condition. The Jews alone seemed to feel at home during these chaotic days. The Nalevski quarter, Warsaw’s ghetto, was rejoicing. Here the hatred for the Polish persecutors of the children of Israel was fierce and consequently
There was pleasure in witnessing the wretched end of Catholic and intolerant Poland. The Jews of Nalevski generally so silent and passive both from prudence and by tradition, betrayed their feelings by very exceptional acts of courage and violence. The Jews were becoming seditions: a bad omen for the Poles.
The news which was brought by refugees from the occupied areas rekindled the spirit of sedition: they said that in every village and town occupied by the Bolsheviks a Soviet mainly composed of local Jews had been set up. Were the persecuted Jews really becoming persecutors? Liberty, vengeance and power were fruits so luscious that the wretched inhabitants of Nalevski longed for a taste of them. The Red Army only a few miles out of Warsaw found a natural ally in the enormous Jewish population of the city which grew daily more numerous and more excited. At the beginning of August there were at least 500,000 of them in Warsaw. I often used to wonder what kept this great seditious mass of people from trying to revolt, filled as they were with a fanatical hatred and hungry for freedom.
What with a dismembered State, a government on its deathbed, a great part of the country invaded and the capital besieged and in disorder, only a thousand men who were determined and ready for anything, could have taken possession of the town without firing a single shot. But my experience of those days taught me that though a Cataline may be Jewish, the instruments of the coup d’Etat could not be recruited from among the Children of Israel. In Petrograd in October 1917 the Cataline of the Bolshevik insurrection was the Jew Trotsky and not the Russian Lenin.: but the executors the Catilines, were practically all Russian sailoars, workers, and soldiers. In his struggle with Stalin in 1927, Trotsky learnt to his cost how dangerous it was to rely on a chiefly Jewish following for carrying out his coup d’Etat.”
This chronicle certainly can be said to show the relationship between the Jewish and Polish communities. Warsaw and parts of Poland had a disproportionately large Jewish population, due in part to the forced removal of Russian Jews to what was called the Pale of Settlement. In the main, most Russian Jews were not of Semitic origin but instead originated in the Kahnate of Kazar located on the western shores of the Caspian Sea. Originally a mixture of Mongol and Turk, the Kahn forcibly converted his subject to Judaism and when the Kahnate eventually disintegrated, its converted Jewish population emigrated westwards, settling in parts of Russia and Poland.
There was always a conflict between the devoutly Catholic Poles and their Jewish eastern immigrants and this is manifested by the hostility expressed in the foregoing section. Because of this seditious behavior, when Pilsudski became the head of the Polish state, he forced large numbers of Jews out of his country and eventually blocked their return. Many were left behind and when the Germans invaded Poland in 1939, a number of small Polish villages rose up against their local Jews and murdered them. In the intervening years, of course, these slaughters were conveniently blamed on the occupying power.
In the section below, we can see the attitude of a high official of the Polish government, Count Jerzy Potocki, Warsaw’s Ambassador to Washington. Count Potocki had taken an active part in the 1920 conflict and his personal views are very clearly set forth here.
The Potocki Reports
After the collapse of the Polish government and the occupation of the capital of Warsaw in September and October of 1939, the Germans located the secret archives of the Polish Foreign Ministery hidden in a bunker. A number of the documents were hastily translated and published by the German government as a White Book in 1940.
The Polish Ambassador to the United States, Count Jerzy Potocki, scion of a famous Polish family, wrote a number of important reports to the Polish Foreign Minister that gave a very clear picture of an educated European's view of American politics and the forces that shaped US foreign policy.
One of these reports dealing with Jewish influence on President Franklin Roosevelt was reprinted in part by General J.F.C. Fuller in his landmark historical work, "A Military History of the Western World" and the General cites this report as having significant bearing on the activities of those who had a great hatred of Germany and Hitler and who also had immediate and significant access to Roosevelt.
The second report under discussion here was also in the Polish Foreign Office files but because it discussed opposition to Hitler, was never included in the German White Paper. Because it reveals very clearly the reasons why Roosevelt hated Hitler and the Germans and intended to force American intervention against him, it is included here.
The first report was written by Count Potocki on January 12, 1939.
To The Foreign Minister in Warsaw:
Public opinion in American nowadays expresses itself in an increasing hatred of Fascism, Chancellor Hitler and everything connected with National Socialism. Above all, propaganda here is entirely in the hands of the Jews who control almost 100 percent of the radio, the films and the daily and periodical press. Although this propaganda is extremely coarse and is designed to present Germany as blackly as possible, when bearing American public ignorance in mind, their propaganda is so effective that people here have no real knowledge of the true state of affairs in Europe.
At the present time, most Americans are taught to believe that Chancellor Hitler and National Socialism are the greatest evil and the greatest peril threatening the world. The situation here provides an excellent program for public speakers of all kinds, among whom are many refugees from Germany and Czechoslovakia who with much effort and many patently false accounts, incite the American public. These speakers praise American liberty which they repeatedly contrast with totalitarian states.
It is interesting to observe that in this carefully thought-out campaign- which is primarily conducted against National Socialism- no reference at all is made to Soviet Russia. If that country is mentioned, it is referred to in a friendly manner and people are given the impression that Soviet Russia is part of the democratic group of nations. Thanks to astute propaganda, public sympathy in the United States is entirely on the side of Communist Spain. Side by side with this pro-Communist propaganda, an artificial war panic is created, The American people are told that peace in Europe is hanging only by a slim thread and that war is inevitable. No effort is spared to impress upon the American mind that in the event of a world war, the United States must take an active part in a struggle for "freedom and democracy." President Roosevelt was the first in the field to give expression to this hatred of Fascism. He had a two-fold purpose in mind: firstly, he wanted to divert American public opinion from difficult and complicated domestic problems, especially the problem of the struggle between capital and labor. Secondly, by creating a war-panic and inventing rumors about threats to Europe, he wanted to induce Americans to endorse his huge program of armaments, a program which far exceeds the United States defense requirements.
Regarding the first point, it must be said that the internal situation here on the labor front is growing steadily worse. The unemployed today already number twelve million. Federal and state expenditures are increasing daily. Only these huge sums, running into billions, which the US treasury expends for emergency labor projects, are keeping a certain amount of peace in the country. Thus far only the usual strikes and local unrest have taken place. As to how long this artificial governmental aid can be kept up is difficult to predict at present. The unhappiness and growing indignation of public opinion coupled with the serious conflict between private enterprise and the enormous trusts on one hand and with a radicalized labor movement on the other, have made many enemies for Roosevelt and are no doubt causing him many sleepless nights.
As to the second point, I can only say that President Roosevelt is a skillful expert in domestic politics and a connoisseur of the American mentality and he has effectively turned public attention away from internal domestic problems and focused it on foreign policy. His means of achieving this effective distraction was simple. He needed, on the one hand, to highlight a fictional war menace threatening the world because of Chancellor Hitler, and on the other hand, to create a specter of war and invasion by speaking ominously about an attack of the totalitarian states on the United States. The Munich pact came to President Roosevelt as a godsend. He described it as the capitulation of France and England to growing and aggressive German militarism. As was said here: Hitler compelled Chamberlain at pistol point, Hence, France and England had no choice but to back down and were compelled to conclude a shameful peace.
Furthermore, the brutal treatment meted out to the Jews in Germany, as well as the problem of the large number of Jewish and anti-German refugees flooding this country are both factors which intensify the existing hatred of everything connected with German National Socialism. In this campaign of hatred, individual Jewish intellectuals such as Bernard Baruch, Lehman the Governor of New York State, Felix Frankfurter, the newly appointed Supreme Court Judge, Morgenthau, the Secretary of the Treasury and other well-known personal friends have taken a prominent part in this campaign of hatred. All of them want the President to become the protagonist of human liberty, religious freedom and the right of free speech and be the man who, in the future, will punish trouble-mongers, especially those who are not liked by Jews. This particular group of people, who are all in highly placed official American positions and who are desirous of being representatives of 'true Americanism' and seen as 'Champions of Democracy' are, in point of fact, linked with international Jewry by ties incapable of being torn asunder. For this Jewish international, so intimately concerned with the interests with its of its own race, President Roosevelt's 'ideal' role as a champion of human rights was indeed a godsend, In this way they are not only able to establish a dangerous center of hatred and enmity in this hemisphere, but also is succeeded in dividing the world into two warlike camps. The whole problem is being worked out in a most mysterious manner. Roosevelt has been given the power to enable him to energize American foreign policy and at the same time create huge reserves in armaments for a future war which the Jews are deliberately heading for. With regards to domestic policy, it is extremely convenient to divert public attention from anti-Semitism which is on the increase in the United States, by talking about the necessity of defending religious faith and individual liberty against the assault of Fascism.
/s/ Jerzy Potocki,
Ambassador of the Republic of Poland
The next report is under the date of April 30, 1939 which Potocki wrote immediately following a private meeting in his residence with General Edwin M."Pa" Watson, an aide and confidant of the American President. Two days earlier, on April 28, Adolf Hitler had delivered a scathing and sarcastic address to the German Reichstag in answer to an April 14 public appeal by Roosevelt to Hitler to guarantee the integrity of a number of countries, including Ireland, Syria and Palestine (which was then occupied by the British). This approach to Hitler was designed solely to appeal to the public in America because it contained so many factual and political blunders that Hitler was able to very effectively heap scorn and sarcasm on both its contents and author.
It was after this speech that General Watson came, at Roosevelt's request, to have a private discussion with the Polish Ambassador.
To the Foreign Minister in Warsaw:
This evening I received in my private residence, General Watson, a close confidant of the American President. The General stated he was acting on the instructions of the President and wished me to convey the content of his information to the Polish Government in Warsaw.
It appears that Chancellor Hitler's speech in Berlin of April 28 has infuriated the President who, the General assures me, believes that Chancellor Hitler has held him up to public ridicule and contempt. These were the exact words used by General Watson.
It was also stated that because the President's family, on both his mother's and father's sides has Jewish blood, the President has additional reasons for hating Chancellor Hitler and the Germans.
The President was apparently surprised and most disturbed by the visit by the German Foreign Minister (von) Ribbentrop to Warsaw in January of this year. The President is aware that the Germans were, and are still, seeking to persuade Poland to join the Anti-Comintern Pact and I assured the General that Poland, while not well-disposed to the French, refused to ally themselves with Chancellor Hitler.
The General went on to state that President Roosevelt felt that Chancellor Hitler must be stopped before he began another war and before he mistreated and expelled all the Jews in Germany. The General especially mentioned Polish Jews in this light. There are very strong sentiments in the United States against becoming involved in another European war and the American President must find another way to fan the flames of war in Europe. It appears from my questions to General Watson that President Roosevelt has very little actual knowledge of conditions in Europe and is acting out of a spirit of vengeance alone.
President Roosevelt, his aide asserted, wishes the Polish Government to firmly resist any attempts on the part of Chancellor Hitler to arrive at a negotiated settlement over the question of Danzig and to stand firm. I was able to assure the General that the Polish Government has no intentions of bowing to pressure from Chancellor Hitler in this matter and would not yield an inch concerning Polish control over former German territories.
The General stated that the President was aware of our attitudes but made a very strong suggestion that the Polish Government fight fire with fire, to quote directly, and openly defy Chancellor Hitler. The President has knowledge of groups of prominent Germans, many in high military and governmental offices, who are completely opposed to Chancellor Hitler and National Socialism and who would rise up against their regime at outbreak of a war.
General Watson furthermore has shown me a copy of a draft treaty with the Soviet Union in which it is set forth that the Soviet Army will join with the Polish Army in attacking the Germans at the slightest provocation. The President has further suggested that such a provocation could easily be supplied by the Polish Government and the ensuing aggression by the German forces would be countered by the bravery of the Polish forces and the might of the Soviet Union.
I attempted to explain to the General that the Polish Government was certainly not friendly with that of the Soviet Union and, in fact, viewed them as dangerous potential enemies, not allies. I also pointed out that the Soviets had invaded Polish territory in 1920 with a view to totally resubjugate the newly-formed Polish state. The General had no knowledge of the Battle for Warsaw in 1920, a battle in which this author certainly played a serious part. The General spoke warmly about the Soviet Union, assuring me that Stalin would have no territorial demands on the Polish state after a military defeat of the Germans and would immediately retire back behind their borders.
The President seems to be woefully lacking in any knowledge of the situation in Poland and one should note further that the Polish Embassy here has received no information about any such potential treaty between the Soviets and Americans. Although the General had with him a transcribed copy of this treaty, it was a draft only and had no identifying signatures of any kind.
This appears to this writer as a mere bluff on the part of the American President and as it was completely impossible to have an informed discussion with his communicant, the General was advised that his message would be passed to the Minister at once.
It does appear that the spite of the American President coupled with his ambition to remain in office is a very dangerous business and his devious meddling in matters he does not understand could lead to very serious consequences, not for the United States which would profit from a European war, but for all of Europe.
/s/ Jerzy Potocki,
Ambassador of the Republic of Poland
Roosevelt was rebuffed by the Poles who later refused passage to the Soviet Army when the British sought a treaty with Stalin before the outbreak of the war. It was Hitler, not Roosevelt, who signed a treaty with Stalin's Russia. In a later attempt to involve the United States in the European war, Roosevelt produced what he claimed was a German plan to invade South America and later the United States. This was highly suspect at the time of its appearance and now is freely acknowledged to be a forgery, prepared at Roosevelt's request.
Hitler's response to Roosevelt was certainly one of his best speeches and deserves to be fully translated into English for the benefit of historians who appear to be oblivious to its impact. It obviously had a serious impact on Roosevelt's ego and led him to a clumsy and extremely irresponsible attempt at involving Poland, Germany and the Soviet Union in a war. This would have been another War of Jenkins' Ear with a petty motive but with devastating consequences.
There are two other Potocki documents, one dealing with an interview with William C. Bullitt, US Ambassador to France, and another that was an analysis of the pro-Soviet circle that surrounded and influenced Roosevelt and encouraged his descent into a war that would only benefit Josef Stalin.
The Polish Foreign Ministry documents have long upset pro-Roosevelt historians and are not contained in works about the outbreak of the Second World War or the foreign policy activities of Roosevelt. However, Potocki and other diplomats whose reports appeared in the German White Paper have fully authenticated all of their dispatches, only some of which appeared in the official German document.
The IMF Catapults From Shunned Agency to Global Central Bank
"A year ago," said law professor Ross Buckley on Australia's ABC News last week, "nobody wanted to know the International Monetary Fund. Now it's the organiser for the international stimulus package which has been sold as a stimulus package for poor countries."
The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of last week's G20 Summit in Pittsburgh was that "the IMF is being anointed as the global central bank." Rickards said in a CNBC interview on September 25 that the plan is for the IMF to issue a global reserve currency that can replace the dollar.
"They've issued debt for the first time in history," said Rickards. "They're issuing SDRs. The last SDRs came out around 1980 or '81, $30 billion. Now they're issuing $300 billion. When I say issuing, it's printing money; there's nothing behind these SDRs."
SDRs, or Special Drawing Rights, are a synthetic currency originally created by the IMF to replace gold and silver in large international transactions. But they have been little used until now. Why does the world suddenly need a new global fiat currency and global central bank? Rickards says it because of "Triffin's Dilemma," a problem first noted by economist Robert Triffin in the 1960s. When the world went off the gold standard, a reserve currency had to be provided by some large-currency country to service global trade. But leaving its currency out there for international purposes meant that the country would have to continually buy more than it sold, running large deficits; and that meant it would eventually go broke. The U.S. has fueled the world economy for the last 50 years, but now it is going broke. The U.S. can settle its debts and get its own house in order, but that would cause world trade to contract. A substitute global reserve currency is needed to fuel the global economy while the U.S. solves its debt problems, and that new currency is to be the IMF's SDRs.
That's the solution to Triffin's dilemma, says Rickards, but it leaves the U.S. in a vulnerable position. If we face a war or other global catastrophe, we no longer have the privilege of printing money. We will have to borrow the global reserve currency like everyone else, putting us at the mercy of the global lenders.
To avoid that, the Federal Reserve has hinted that it is prepared to raise interest rates, even though that would mean further squeezing the real estate market and the real economy. Rickards pointed to an oped piece by Fed governor Kevin Warsh, published in The Wall Street Journal on the same day the G20 met. Warsh said that the Fed would need to raise interest rates if asset prices rose - which Rickards interpreted to mean gold, the traditional go-to investment of investors fleeing the dollar. "Central banks hate gold because it limits their ability to print money," said Rickards. If gold were to suddenly go to $1,500 an ounce, it would mean the dollar was collapsing. Warsh was giving the market a heads up that the Fed wasn't going to let that happen. The Fed would raise interest rates to attract dollars back into the country. As Rickards put it, "Warsh is saying, 'We sort of have to trash the dollar, but we're going to do it gradually.' . . . Warsh is trying to preempt an unstable decline in the dollar. What they want, of course, is a stable, steady decline."
What about the Fed's traditional role of maintaining price stability? It's nonsense, said Rickards. "What they do is inflate the dollar to prop up the banks." The dollar has to be inflated because there is more debt outstanding than money to pay it with. The government currently has contingent liabilities of $60 trillion. "There's no feasible combination of growth and taxes that can fund that liability," Rickards said. The government could fund about half that in the next 14 years, which means the dollar needs to be devalued by half in that time.
The Dollar Needs to be Devalued by Half?
Reducing the value of the dollar by half means that our hard-earned dollars are going to go only half as far, something that does not sound like a good thing for Main Street. Indeed, when we look more closely, we see that the move is not designed to serve us but to serve the banks. Why does the dollar need to be devalued? It is to compensate for a dilemma in the current monetary scheme that is even more intractable than Triffin's, one that might be called a fraud. There is never enough money to cover the outstanding debt, because all money today except coins is created by banks in the form of loans, and more money is always owed back to the banks than they advance when they create their loans. Banks create the principal but not the interest necessary to pay their loans back.
The Fed, which is owned by a consortium of banks and was set up to serve their interests, is tasked with seeing that the banks are paid back; and the only way to do that is to inflate the money supply to create the dollars to cover the missing interest. But that means diluting the value of the dollar, which imposes a stealth tax on the citizenry; and the money supply is inflated by making more loans, which adds to the debt and interest burden that the inflated money supply was supposed to relieve. The banking system is basically a pyramid scheme, which can be kept going only by continually creating more debt.
The IMF's $500 Billion Stimulus Package:
Designed to Help Developing Countries or the Banks?
And that brings us back to the IMF's stimulus package discussed last week by Professor Buckley. The package was billed as helping emerging nations hard hit by the global credit crisis, but Buckley doubts that that is what is really going on. Rather, he says, the $500 billion pledged by the G20 nations is "a stimulus package for the rich countries' banks."
Why does he think that? Because stimulus packages are usually grants. The money coming from the IMF will be extended in the form of loans.
These are loans that are made by the G20 countries through the IMF to poor countries. They have to be repaid and what they're going to be used for is to repay the international banks now. . . . [T]he money won't really touch down in the poor countries. It will go straight through them to repay their creditors. . . . But the poor countries will spend the next 30 years repaying the IMF.
Basically, said Professor Buckley, the loans extended by the IMF represent an increase in seniority of the debt. That means developing nations will be even more firmly locked in debt than they are now.
At the moment the debt is owed by poor countries to banks, and if the poor countries had to, they could default on that. The bank debt is going to be replaced by debt that's owed to the IMF, which for very good strategic reasons the poor countries will always service. . . . The rich countries have made this $500 billion available to stimulate their own banks, and the IMF is a wonderful party to put in between the countries and the debtors and the banks.
Not long ago, the IMF was being called obsolete. Now it is back in business with a vengeance; but it's the old unseemly business of serving as the collection agency for the international banking industry. As long as third world debtors can service their loans by paying the interest on them, the banks can count the loans as "assets" on their books, allowing them to keep their pyramid scheme going by inflating the global money supply with yet more loans. It is all for the greater good of the banks and their affiliated multinational corporations; but the $500 billion in funding is coming from the taxpayers of the G20 nations, and the foreseeable outcome will be that the United States will join the ranks of debtor nations subservient to a global empire of central bankers.
The Lessons of the Savings-and-Loan Crisis
AN INTERVIEW WITH WILLIAM BLACK: The current bank scandal dwarfs the 1980s savings-and-loan crisis -- and could destroy the Obama presidency.
WILLIAM BLACK CALLS THEM AS HE SEES THEM, which is why we enjoy talking with him. Black, 57 years old, was a deputy director at the former Federal Savings and Loan Insurance Corp. during the thrift crisis of the 1980s, and now serves as an associate professor, teaching economics and law at the University of Missouri, Kansas City. At FSLIC, a government agency that insured S&L deposits, Black prevailed in showdowns with the powerful Democratic Speaker of the House, Jim Wright, and helped identify the infamous Keating Five, a group of U.S. senators (including Sen. John McCain, the Arizona Republican who lost his bid for the presidency in 2008) who tried to quash his attempt to close Charles Keating's Lincoln Savings & Loan. Wright eventually resigned amid unrelated ethics charges, and the senators were reprimanded for poor judgment. Keating went to jail for securities fraud.For Black's provocative thoughts on the current financial crisis, read on.
Barron's: Just how serious is this credit crisis? What is at stake here for the American taxpayer?
Black: Mopping up the savings-and-loan crisis cost $150 billion; this current crisis will probably cost a multiple of that. The scale of fraud is immense. This whole bank scandal makes Teapot Dome [of the 1920s] look like some kid's doll set. Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama's presidency. The Bush administration was even worse. But they are out of town. This will destroy Obama's administration, both economically and in terms of integrity.
So you are saying Democrats as well as Republicans share the blame? No one can claim the high ground?
We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure? If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems. Geithner especially represents a failed regulator, having presided over the bailouts of major New York banks.
So you aren't a fan of the recently announced plan for the government to back private purchases of the toxic assets?
It is worse than a lie. Geithner has appropriated the language of his critics and of the forthright to support dishonesty. That is what's so appalling -- numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians.
The current law mandates prompt corrective action, which means speedy resolution of insolvencies. He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent. He has introduced the concept of capital insurance, essentially turning the U.S. taxpayer into the sucker who is going to pay for everything. He chose this path because he knew Congress would never authorize a bailout based on crony capitalism.
Geithner is mistaken when he talks about making deeply unpopular moves. Such stiff resolve to put the major banks in receivership would be appreciated in every state but Connecticut and New York. His use of language like "legacy assets" -- and channeling the worst aspects of Milton Friedman -- is positively Orwellian. Extreme conservatives wrongly assume that the government can't do anything right. And they wrongly assume that the market will ultimately lead to correct actions. If cheaters prosper, cheaters will dominate. It is like Gresham's law: Bad money drives out the good. Well, bad behavior drives out good behavior, without good enforcement.
His plan essentially perpetuates zombie banks by mispricing toxic assets that were mispriced to the borrower and mispriced by the lender, and which only served the unfaithful lending agent.
We already know from the real costs -- through the cleanups of IndyMac, Bear Stearns, and Lehman -- that the losses will be roughly 50 to 80 cents on the dollar. The last thing we need is a further drain on our resources and subsidies by promoting this toxic-asset market. By promoting this notion of too-big-to-fail, we are allowing a pernicious influence to remain in Washington. The truth has a resonance to it. The folks know they are being lied to.
I keep asking myself, what would we do in other avenues of life? What if every time we had a plane crash we said: 'It might be divisive to investigate. We want to be forward-looking.' Nobody would fly. It would be a disaster.
We know that with planes, every time there is an accident, we look intensively, without the interference of politics. That is why we have such a safe industry.
Summarize the problem as best you can for Barron's readers.
With most of America's biggest banks insolvent, you have, in essence, a multitrillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale.
These firms will ultimately have to be forced into receivership, the management and boards stripped of office, title, and compensation. First there needs to be a clearing of the air -- a Pecora-style fact-finding mission conducted without fear or favor. [Ferdinand Pecora was an assistant district attorney from New York who investigated Wall Street practices in the 1930s.] Then, we need to gear up to pursue criminal cases. Two years after the market collapsed, the Federal Bureau of Investigation has one-fourth of the resources that the agency used during the savings-and-loan crisis. And the current crisis is 10 times as large.
There need to be major task forces set up, like there were in the thrift crisis. Right now, things don't look good. We are using taxpayer money via AIG to secretly bail out European banks like Société Générale, Deutsche Bank, and UBS -- and even our own Goldman Sachs. To me, the single most obscene act of this scandal has been providing billions in taxpayer money via AIG to secretly bail out UBS in Switzerland, while we were simultaneously prosecuting the bank for tax fraud. The second most obscene: Goldman receiving almost $13 billion in AIG counterparty payments after advising Geithner, president of the New York Fed, and then-Treasury Secretary Henry Paulson, former Goldman Sachs honcho, on the AIG government takeover -- and also receiving government bailout loans.
What, then, is staying the federal government's hand? Have the banks become too difficult or complex to regulate?
The government is reluctant to admit the depth of the problem, because to do so would force it to put some of America's biggest financial institutions into receivership. The people running these banks are some of the most well-connected in Washington, with easy access to legislators. Prompt corrective action is what is needed, and mandated in the law. And that is precisely what isn't happening.
The savings-and-loan crisis showed that, too often, the regulators became too close to the industry, and run interference for friends by hiding the problems.
Can you explain your idea of control fraud, and how it applies to the current banking and the earlier thrift crisis?
Control fraud is when a seemingly legitimate corporation uses its power as a weapon to defraud or take something of value through deceit.
In the savings-and-loan crisis, thrifts engaged in control frauds in order to survive. Accounting trickery proved to be the weapon of choice. It is at work today with the banks, and it is their Achilles heel. You report that you are highly profitable when you engage in accounting-control fraud, not only meeting but exceeding capital requirements. These accounting frauds create huge bubbles, which in turn create large bonuses, which in turn lead to huge losses.
Why then is there so much smoke and so little action?
First, they are inundated by the problem. They are trying to investigate the major problems with severely depleted staffs. Honestly. We have lost the ability to be blunt. Now we have a situation where Treasury Secretary Geithner can speak of a $2 trillion hole in the banking system, at the same time all the major banks report they are well-capitalized. And you have seen no regulatory action against what amounts to a $2 trillion accounting fraud. The reason we don't see it -- aren't told about it -- is that if they were honest, prompt corrective action would kick in, and they would have to deal with the problem banks.
Are there any parallels between the current crisis and the savings-and-loan crisis that give you hope?
Of course. Objectively, our case was even more hopeless in the S&L debacle than in the current crisis. If we were able to do it in such an impossible circumstance back then, we have reason for hope in the current crisis. I know how easily things can get off course and how quickly things can turn back again. The thrift crisis went through several lengthy courses and distortions before it finally was resolved under the leadership of Edwin Gray, the chairman of the Federal Home Loan Bank Board, which oversaw FSLIC.
We went through almost a decade of cover-ups by a Washington establishment intent on helping thrift owners. Back then, we had the Justice Department threatening to indict Gray, the head of a federal agency, for closing too many thrifts. Next, there were those so-called resolutions, where the regulators worked day and night -- to create even bigger problems for the FSLIC. Years later, these so-called resolution deals had to be unwound at great expense by closing down even larger failures. Or how about the bill to replenish the depleted thrift-insurance fund that was blocked and delayed by then-Speaker of the House, Texas congressman Jim Wright?
You say the evidence of a breakdown in the regulatory structure comes from the fact that America avoided an earlier subprime crisis in the 1990s.
Exactly. Why had no one heard of the subprime crisis back in 1991? Because America's regulators also faced down the crisis early. The same thing happened with bad credits being securitized in the secondary market. Remember the low-doc or no-doc mortgages done by Citibank? Well, the problem didn't spread -- because regulators intervened.
Obama, who is doing so well in so many other arenas, appears to be slipping because he trusts Democrats high in the party structure too much.
These Democrats want to maintain America's pre-eminence in global financial capitalism at any cost. They remain wedded to the bad idea of bigness, the so-called financial supermarket -- one-stop shopping for all customers -- that has allowed the American financial system to paper the world with subprime debt. Even the managers of these worldwide financial conglomerates testify that they have become so sprawling as to be unmanageable.
What needs to be done?
Well, these international behemoths need to be broken down into smaller units that can be managed effectively. Maybe they can be broken up the way that the Standard Oil split up back in the early 1900s, through a simple share spinoff.
The big problem for the last decade is that we have had too much capacity in the finance sector -- too many banks have represented a drain on our talent and resources. All these mergers haven't taken capacity out of the system. They have created even bigger banks that concentrate risk to the taxpayer, and put off dealing with problems.
And a new seriousness must be put into regulation. We don't necessarily need new rules. We just need folks who can enforce the ones already on the books.
The bank-compensation system also creates an environment that leads to mismanagement and fraud. No one has to tell someone they have to stretch the numbers. It is all around them. It is in the rank-or-yank performance and retention systems advocated by top business executives. Here, the top 20% get the bulk of the benefits and the bottom 10% get fired. You don't directly tell your employees you want them to lie and cheat. You set up an atmosphere of results at any cost. Rank or yank. Sooner rather than later, someone comes up with the bright idea of fudging the numbers. That's big bonuses for the folks who make the best numbers. It sends the message -- making the numbers is what is most important. There is a reason that the average tenure of a chief financial officer is three years.
Compensation systems like I have just described discourage whistleblowing -- the most common way that frauds are found in America -- because the system draws upon the cooperation of everyone.
The basis for all regulation and white-collar crime is to take the competitive advantage away from the cheats, so the good guys can prevail. We need to get back to that.
Thanks, Bill.
William Black, Associate Professor, Economics and Law,
University of Missouri, Kansas City
By JACK WILLOUGHBYUniversity of Missouri, Kansas City
Spending surges, but jobless claims rise
WASHINGTON - First-time claims for jobless benefits increased more than expected last week, a sign employers are reluctant to hire and the job market remains weak.
The increase comes after three weeks of declines. Weekly claims have been trending down since the spring, but the decline has been painfully slow. The four-week average, which smoothes out fluctuations, dropped to 548,000, about 110,000 below its peak in early April.
And even though consumer spending jumped by the most in nearly eight years in August, due partly to the government's Cash for Clunkers program, economists question whether the improvement can be sustained. They note that households face rising unemployment, tight credit conditions and other obstacles.
The Labor Department said Thursday that initial claims for unemployment insurance rose to a seasonally adjusted 551,000 from 534,000 in the previous week. Wall Street economists had expected an increase to 535,000, according to a survey by Thomson Reuters.
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Spending surges, jobless claims jump Oct. 1: U.S. consumer spending rose at its fastest pace in nearly 8 years in August. Separately, a report from the Labor Department showed initial claims for state unemployment insurance rose more than expected. A CNBC panel breaks down today's data. CNBC |
The increase comes after three weeks of declines. Weekly claims have been trending down since the spring, but the decline has been painfully slow. The four-week average, which smoothes out fluctuations, dropped to 548,000, about 110,000 below its peak in early April.
"This is a bit disappointing but not unduly alarming," Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a note to clients. The increase "leaves the downward trend in claims intact."
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers. Many economists say initial claims below 400,000 would be a signal that employers are adding to the net total of jobs.
Separately, a private trade group said Thursday that manufacturing activity expanded for the second straight month in September, but at a slightly slower pace than in August.
The Institute for Supply Management's index of manufacturing activity was 52.6, down from 52.9 in August. Economists expected a reading of 54. Figures above 50 indicate the sector is expanding.
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Major stock indicators fell more than 1 percent in morning trading after the disappointing manufacturing and jobs reports.
The Dow Jones industrial average fell about 125 points.
The number of people remaining on the rolls, meanwhile, fell 70,000 to 6.09 million, the lowest level since the week of April 4.
The claims data come a day before the September unemployment report due Friday. Economists forecast that report will show the unemployment rate rose to 9.8 percent from 9.7 percent in August. Most economists expect the rate to top 10 percent by early next year.
Employers are expected to have cut 180,000 jobs in September, down from 216,000 in August.
Continuing claims have declined slowly from a record level of 6.9 million in late June, "suggesting that the unemployment rate is near its peak," Abiel Reinhart, an economist at JPMorgan Chase, wrote in a note to clients.
But when federal emergency programs are included, the total number of jobless benefit recipients was nearly 9 million in the week that ended Sept. 12. That's little changed from the previous week. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states. The House last week approved legislation adding another 13 weeks of benefits, and the Senate could pass a similar measure Thursday.
The large number of people remaining on the rolls indicates that unemployed workers are having a hard time finding new jobs.
Consumer spending, which accounts for 70 percent of total economic activity, jumped in August by the largest amount in nearly eight years even though personal incomes continued to lag.
The Commerce Department said Thursday that consumer spending rose 1.3 percent in August, even better than the 1.1 percent gain that had been expected. But incomes edged up 0.2 percent, the same as in July.
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The surge in consumer spending is a strong signal that the economy was returning to growth this summer. But any rebound from the recession could falter if income growth does not improve, economists said.
Meanwhile, construction spending rose 0.8 percent in August, much better than the 0.2 percent drop that economists had expected. It reflected a 4.7 percent rise in private residential activity, the biggest one-month increase since November 1993. Spending on other projects dropped in August.
The recession, which began in December 2007 and is the worst since the 1930s, has eliminated a net total of 6.9 million jobs.
Most analysts expect the economy grew by about 3 percent in the July-September quarter, technically ending the recession. But Federal Reserve Chairman Ben Bernanke said last month that growth isn't expected to be strong enough to reduce the jobless rate for some time.
Among the states, California had the largest increase in claims, with 5,112, which it attributed to layoffs in the construction, transportation and agriculture industries. Texas, Florida, Iowa and Illinois had the next largest increases. State data lag the initial claims figures by one week.
Kansas had the largest drop in claims, with 1,545. Wisconsin, Oregon, Ohio and New York had the next largest declines.
Bank of America’s Lewis Resigns After Bet on Rebound (Update2)
Oct. 1 (Bloomberg) -- Kenneth D. Lewis bet Bank of America Corp.’s future on America at a time when America went bust.
Lewis, 62, said yesterday he will resign as chief executive officer at the end of the year, leaving his successor to capitalize on, or salvage, the acquisitions that led to his downfall. The bank didn’t name a replacement.
The CEO has become a distraction, pilloried by regulators and lawmakers since he engineered the $29 billion takeover of Merrill Lynch & Co. in January and bought subprime home lender Countrywide Financial Corp. in 2008, said CreditSights Inc. analyst David Hendler.
“He’s drifting out to sea like a dying Eskimo, knowing the company can do better and thrive without him,” Hendler said.
Bank of America more than tripled in size since Lewis took over in April 2001 and became the biggest U.S. lender by assets and deposits. He spent more than $130 billion on acquisitions.
In the worst housing slump since the 1930s, Lewis bought Countrywide, the nation’s biggest home lender, and as financial markets teetered near collapse a year ago, he agreed to pay $29 a share for Merrill Lynch, the world’s largest brokerage. The U.S. economy then shrank for four quarters, including a 6.4 percent contraction of gross domestic product in the first three months of this year.
Lewis is one of the last leaders of the biggest U.S. financial firms to depart in the three-year-old financial crunch. Other CEOs who have left under pressure include James Cayne of Bear Stearns Cos., Charles Prince of Citigroup Inc., Stanley O’Neal of Merrill, Kennedy Thompson of Wachovia and Richard Fuld of Lehman Brothers Holdings Inc.
Merrill Pays Off
Jamie Dimon, CEO of JPMorgan Chase & Co., strengthened his bank by taking on the assets of Bear Stearns in a government- assisted transaction. John Mack, the head of Morgan Stanley, said he plans to step down as CEO on Jan. 1.
Lewis, who started as a credit analyst at NCNB Corp. in 1969, has said the Merrill bet is already paying dividends. The brokerage contributed 24 percent of the company’s first-half profit as an improving stock market and soaring demand for debt issues boosted trading and investment-banking revenue, while the retail bank struggled to curb rising defaults on credit cards, consumer loans and commercial real estate.
“I am gratified that even some of the critics of our acquisition of Merrill Lynch have come to acknowledge how well the deal is working out for our clients,” Lewis said in a memo to employees yesterday. “This journey has been a rocky one and not for the faint of heart, but perseverance is paying off.”
Dividend, Shares Drop
Potholes included the reduction of the bank’s quarterly dividend to 1 cent from 64 cents in 2008, and the shares remain more than a third lower than in April 2001 when Lewis became CEO. The Standard & Poor’s 500 Index declined 14 percent during the same period. The stock fell 20 cents to $16.72 at 10:10 a.m. in New York Stock Exchange trading.
Lewis’s journey may have been cut short by the Merrill deal, which he arranged in September 2008 as Lehman, once the biggest underwriter of mortgage securities, was collapsing. He tried to cancel the acquisition last December as fourth-quarter losses at the brokerage spiraled past $15 billion.
That triggered a clash with regulators, including then- Treasury Secretary Hank Paulson, who told Lewis management might be ousted if the deal wasn’t completed, according to Paulson’s congressional testimony. It also led to probes of the deal by Congress, the Securities and Exchange Commission and New York’s attorney general on whether Lewis had misled investors about Merrill’s losses and bonuses.
Settlement Rejected
A federal judge in September rejected a $33 million settlement between the bank and the SEC tied to the bonuses, asking whether the bank had lied to shareholders and why the company’s executives haven’t been sued. At the April annual meeting, shareholders stripped Lewis of the chairman’s title.
Lewis said in the memo to staff he was “disappointed in how we managed credit risk. The next two quarters will be difficult.” The bank will be “an earnings machine” when the economy rebounds, Lewis wrote. The bank may report profit of $7.4 billion this year, $12.6 billion in 2010 and $23 billion in 2011, according to analysts’ estimates compiled by Bloomberg.
“Their loan portfolio is horrible looking and it’s not going to be easy for them,” Mike Williams, research director at Gradient Analytics in Scottsdale, Arizona, said in an interview before Lewis announced his departure. “They would have been better off without the Merrill and Countrywide acquisitions over the next few years.”
Shareholder Opposition
The resignation “is the overdue but inevitable result of the overwhelming shareholder opposition registered at Bank of America’s 2009 annual meeting,” said William Patterson, executive director of CtW Investment Group, a union-sponsored group that pushed for the CEO’s ouster earlier this year.
Andrew Cuomo, the New York attorney general, has said he’s deciding whether to bring charges against executives. In a statement, Cuomo said Lewis’s departure won’t affect his probe.
“We hope that Bank of America’s new leadership will quickly repay American taxpayers and help us finally resolve unanswered questions about this merger,” said Edolphus Towns, a New York Democrat and chairman of the House Oversight Committee that grilled Lewis about the Merrill deal.
Bank of America’s board will set up a committee to find a successor, spokesman Robert Stickler said. Internal candidates include retail-bank leader Brian Moynihan, 49, home-lending head Barbara Desoer, 56, investment-banking head Tom Montag, 52, Chief Financial Officer Joe Price, 48, wealth-management’s Sallie Krawcheck, 44, and Greg Curl, chief risk officer.
‘Hang On’
There is “no indication” that the bank’s headquarters would leave North Carolina, Stickler said.
“I really thought that he would hang on long enough for Brian Moynihan to get enough experience as the head of retail so that he could step into Lewis’s shoes,” said Nancy Bush, an independent bank analyst in Annandale, New Jersey. Montag, who joined Merrill Lynch last year from Goldman Sachs Group Inc., and Krawcheck, who came in August, are unlikely picks because of their short tenure, Hendler said.
Lewis’s resignation after 40 years, including the last eight as CEO, “was my decision and mine alone,” he told employees in the memo. While Lewis denied any outside pressure prompted his decision, “all the nasty things said about him in so many different circles were beginning to weigh on him,” said a person familiar with the CEO’s thinking.
Bank’s Acquisitions
Acquisitions during his tenure included FleetBoston Financial Corp. for $48 billion in 2004, MBNA Corp for $35 billion in 2006, LaSalle Bank of Chicago for $21 billion in 2007 and Countrywide for $2.5 billion in 2008.
Lewis said in a June 2007 interview that Bank of America’s best potential for growth is at home, not in Europe or Asia. He cited research by his company and a separate study by McKinsey & Co. that show the U.S. offers the greatest potential for new fees in the next decade, even more than Europe or Asia.
Lewis was “focused on size and footprint and market share,” said Jonathan Finger, whose Houston family owns 1.1 million shares and pressed for Lewis’s resignation this year. “You listen to a lot of their conference calls announcing these mergers, that’s what they talked about, they never talked about return on equity or return to shareholders.”
Company ‘Farther Along’
Lewis had said this year he planned to resign once the bank matched its record profit of $21 billion in 2006, then later said he expected to stay until the bank repaid funds from the U.S. Troubled Asset Relief Program. He reconsidered after working half-days at his Colorado home in August, Stickler said.
“The company is farther along, partly because the economy is doing better than expected, and we’re poised to pay back TARP,” Stickler said.
Bank of America’s board met in a telephone conference meeting after Lewis told Chairman Walter Massey of his retirement plans, Stickler said. Massey told Lewis that the board was “fully behind him,” Stickler said.
While Lewis isn’t entitled to severance, he stands to collect pension benefits worth $53.2 million, largely from a retirement program that was frozen in 2003, the New York Times reported, citing an analysis of corporate filings by James F. Reda & Associates, an independent consulting firm. Lewis will also walk away with $81.8 million in stock and other compensation that he accumulated over his career, the analysis found.
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